Compass Group Shares Rose on $250M Share Buyback Program

The Compass Group plc (LON: CPG) share price rose 0.66% after announcing that it had entered into a non-discretionary agreement with BNP Paribas Arbitrage S.N.C. (BNPP) to allow for the purchase of the company’s ordinary shares worth up to a market equivalent of $250 million (being equal to £197.34 million as at 1 December 2023). 

The share buyback program shall run for the first half of next year, starting from 4 December 2023 to 8 May 2024. The share buyback program represents the first half of the $500 million share buyback program announced along with the company’s full-year results on 20 November 2023. 

The completion of the entire share buyback program in 2024 remains contingent on potential merger and acquisition (M&A) activities. The primary objective behind the H1 Buyback is to effectively reduce the Company's share capital by returning surplus capital to its valued shareholders.

The H1 Buyback will be executed within specified parameters. The Company's shareholders had previously authorised to purchase a maximum of 175,720,000 Ordinary Shares during the Company's 2023 Annual General Meeting held on February 9, 2023, subject to certain limitations (referred to as the “General Authority”). 

Considering the Company's prior purchases of its Ordinary Shares leading up to this announcement, it is currently authorised, under the General Authority, to acquire a maximum of 139,625,908 Ordinary Shares. 

BNPP is responsible for independently making its trading decisions related to the Company's Ordinary Shares and is not influenced by the Company in this regard. 

As per the General Authority, the acquisition of Ordinary Shares through the H1 Buyback may occur on any appropriately regulated stock market, with subsequent on-sale of these shares by BNPP to the Company, which will take place on the London Stock Exchange.

Additionally, apart from adhering to the terms of the General Authority, the H1 Buyback will strictly adhere to the parameters defined by Regulation (EU) No 596/2014, commonly known as the Market Abuse Regulation, as applicable in the UK and as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019.

Compass Group share price. 

The Compass Group share price rose 0.66% to trade at 2038.0p from Friday’s closing price of 2024.5p.